Economic aspects of addiction policy

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Abstract
One definition of policy or government action in the Oxford English Dictionary is “craftiness” i.e. cunning or deceit. Such qualities have to be employed by governments because of the potential vote-losing effects of radical addiction policies. Health promotion, in relation to addictive substances such as alcohol and tobacco in particular, involes a trade-off between the costs of such policies, especially to industry (which seeks regulation to protect itself from competitors), and the benefits—improvements in the quality and length of life. Measures of such benefits (quality-adjusted lifeyears or QALYs) are available now to use in the evaluation of competing health promotion policies to determine their efficiency at the margin. Analysis of the market for tobacco indicates that consumption has been falling generally in the UK except among teenagers who appear to be the target of the industry's advertising and sponsorship efforts. This fall in consumption appears to be explained by health promotion rather than the active use of fiscal instruments of control. The recognition of the health effects of passive smoking and the impact of advertising and sponsorship, especially on the young, are policy areas requiring careful review and the evaluation of the costs and benefits of competing policies. The consumption of alcohol, in litres of pure alcohol per head aged 15 years and over, has increased by 60 per cent in the last 20 years. This trend appears to be explained by the falling real prices of spirits and wine in particular and rising real incomes. The control of this growth would require fiscal policies to raise prices in excess of inflation so that the effects of purchasing power increases were counteracted. The potential benefits of such a policy in terms of mortality avoided may be very substantial (perhaps in excess of 60 000 (table 8) if the Malmo results are applicable to the UK. Policy-making needs to be illuminated by careful economic evaluation of market trends so that cost-benefit trade-offs are explicit rather than covert facilitators of “craftiness” and vote maximisation by government.

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